UK Landlord Forum / Life

I've been with the same agent for over 10 years.  Rent two properties with them.  Its a small, local agent, they're not perfect but they always stumble through. 

After reading these forums for a while I decided to check for a deposit on the DPS website.  Nothing showed up for one of the properties.  I emailed the agent, no response.  Emailed again, got a terse one liner "its protected".  Emailed again asking for documentation and then got an admission that it hadn't been protected.  It is now.  They did it a few days after my first email.

I've finally had a chat with the director and she has admitted that any claim against me is fully their liability and she'll put that in writing.  So from that perspective its as good as it can be.  She isn't quite sure what happens next however as she's never had to deal with this before.  She did find another 2 tenancies not protected that were set up around about the same time so something has gone wrong in her office.  I think I know which former member of staff was responsible.

Just want to confirm my understanding.  Tenant has up to 6 years from date on which the deposit should have been protected to make a claim, is that correct?  Tenancy is for two years until Aug this year, whats the situation at renewal?

The tenant himself is very, very good.  The place is immaculate and he's already asked about extending.  I've done quite a few small repairs there over the course of the tenancy to keep him on side and I get on well with him.  No reason to believe he would make a claim, but of course you never know.  Its close to free money for him.

What else should I ask the agent to do?  There's the letter supposedly on its way, and I've asked for details of their professional liability insurance.  My other property with them has a new tenancy being set up so I'm using that as leverage to keep them focused.  I've asked them to go back over the last 6 years and check all the other tenancies were protected. 

Thanks for any help.

Quote from: prospecttech on April 11, 2019, 09:15:53 AMI've finally had a chat with the director and she has admitted that any claim against me is fully their liability and she'll put that in writing.

Interesting, because it's really not... the buck does stop with you as Landlord. You have checked, after reading-up about it, but the fact remains you needed to be aware of this earlier. Hindsight is 20/20. I think you are doing good if the Agent comes true on this.

Tenant has 6 years to claim, yes. The situation at renewal isn't changed - you can renew. But the Tenant will already be aware of what's going on because they must have been involved in the recent protection of the Deposit... the Agent can't do it in the background without their knowledge. They need to have been served paperwork etc.. As the Deposit is protected now, there should be no implications apart from the current Tenancy that seems to have been running for close to 2 years, and that was just the original fixed term, no renewals?

It is very close to free money for the Tenant. How much was the Deposit in £s?

You're right that nothing at all might happen. It's good that you have a good relationship with the Tenant, but things can change.

Yes, I realise the buck stops with me.  What I means is that the agent has agreed to compensate me should the tenant claim against me. 

The question though is to what extent can I make that stick?  The ideal would be for them to put money in escrow but I can't see them agreeing.  The other option would be to claim against their liability insurance since they have been negligent in carrying out their duties.

The tenancy is a two year fixed term, started in Aug 2017.  Deposit is #3300 so just under 10 grand at risk.

How is the tenant involved in protecting the deposit?  I thought the agent did that through their account at the DPS.  Do DPS notify the tenant when something related to their deposit happens?

What is the effect on me personally if the tenant claims?  I don't mean financially, I know that, I mean reputation wise?  Is it a court judgement of some sort?  The tenancy is in England, I am in Scotland.  There are landlord checks in Scotland I believe so would it impact my ability to be a landlord in Scotland?

Quote from: prospecttech on April 11, 2019, 10:09:00 AMHow is the tenant involved in protecting the deposit?  I thought the agent did that through their account at the DPS.  Do DPS notify the tenant when something related to their deposit happens?

The Tenant is informed at all stages by the Scheme - that's true whether it's Custodial or Insured - the Agent can't just protect it without the knowledge of the Tenant, so may I suggest you're wary of what you're being told? The DPS (as one example, but true of myDeposits too - the two that I have experience of) definitely notify the Tenant of anything that happens to their Deposit... this is via an email address provided when it's protected. However, to protect the Deposit correctly, the Tenant also needs to be served the Prescribed Information... again, this is not something the Agent can avoid doing, if you are to consider the Deposit protected correctly.

A Deposit protected in time but without having the Prescribed Information (and Terms and Conditions of the Scheme in question) served carries the same penalty - it's not an a la carte menu I'm afraid... it's like all-or-nothing. I mean, the Tenant would need the unique Deposit ID providing so they could check their Deposit on-line too, right?

I'm going to say... everything is different in Scotland, right? My advice is probably on the money... but I have no experience of the Scotland Deposit Schemes. For example, I'd never even heard of SafeDeposits (I just Googled it).

Anyway, from https://www.mygov.scot/tenancy-deposits-landlords/ - "Once you register the deposit with one of these providers, you have to give written information to your tenant:"

My apologies - I speed-read - the tenancy is in England.

If the Tenant comes to you at some point and asks for compensation... which would be due... people on here would likely always advise you negotiate. This can avoid the need for any kind of case being brought before a Court. If it reaches that point then you already know your minimum and maximum exposure (plus costs)... and that you would lose the case if a Court heard it. The question is whether you attempt to get something sorted in full and final settlement to avoid the things you talk about... a judgement. It's not a criminal record you end up with.

If the Tenant is a reasonable person they'd also have done some research and would realise they're not automatically due 3x. So that's why negotiation in good faith would become key... you know they'd be due at least 1x, everyone should realise it could be up to 3x (but no more)... and you throw some money at the problem to make it go away... because everyone also realises a) there's no point fighting it, and b) it's free money and c) no actual harm has been done. It's about you getting off the back-foot and taking control. Then no case, no judgement, no worries... just an expensive learning experience... now, whether your Agent would go for that pragmatic approach is another question entirely.

And whether your Tenant would ever do anything is yet another question entirely... although if they've recently become aware their Deposit has only just been protected then they might be mulling things, and Googling...

Thanks.  Yes, I've come to the same conclusion.  Instead of this hanging over me for another 4.5 years and relying on the Agent's good faith at some time in the future, approach the tenant now, with the Agent in tow, and come to some agreement.  Which the Agent has to fund.

I would love to be a fly-on-the-wall in that discussion (the one where you get the Agent to agree to that plan)... can you record it please and put it on the Internet?

I don't disagree, though... the exposure is an impressive one, and if you have the Agent meekly agreeing, now, that they'll be liable... it doesn't take, that, much for them to just shut up shop and start a new company (might sound far-fetched, but the exposure is real) and wash their hands of it... a luxury you would probably not have yourself.

I would also be seeking absolute clarity on what the Agent has done with the Deposit when they tell you it's now protected.

Worth remembering that they lied to you in the first instance, only admitting fault when pushed on it.

Ok, so I've got the letter from the agent detailing what happened and stating that they will compensate me for any financial loss I might suffer. 

May not be worth the paper its written up but shows that they are cooperating.  The agent has now agreed to negotiate with the tenant to reach a final settlement for the matter.

What do I need from the tenant in order to settle?  If we can draft an agreement, possibly/probably with financial incentive, and get the tenant to sign up to it, is that enough to derail any future claims?  I know court ordered compensation ranges from 1x to 3x but can we settle on a lower amount by mutual agreement?

You can settle on a lower amount (or no amount) by mutual agreement.

It would seem to be a rather foolish, or incredibly easygoing, Tenant who would agree to that idea though.

I think it would be wise to get something entitled something like "Settlement Agreement" documented and signed and dated, "in full and final settlement"... I doubt you need to go to the hassle of it being drafted by a Solicitor or witnessed - but you could if you thought it might come back to bite you. I suspect, in these times, all it takes is for your relationship to break down and the Tenant start to misremember all of this as coercion and something they were forced into doing, 2 against 1 and all that... y'know?

Some people would obviously simply appreciate the windfall for what it was and be happy and honourable.

Well, the skeptics amongst you may be shocked to hear this, but I have now received a signed letter from the tenants acknowledging the situation and stating that they do not intend to pursue either myself or the agent. 

No compensation was requested or made.

Thanks for the advice received here.